Gifting; how to get it right

In January 2018, The Office of the Public Guardian updated their published practice note to help. It can be found in the publications section of the Government services website and is well worth a read.

There are some potential surprises. Did you know that a gift isn't just transferring money or property to someone else? An interest free loan or selling something for less than its value counts as a gift.

The first thing to check is whether the person you are looking after has capacity to make a gift themselves. Often somebody is able to make a decision about a small amount of money, even if they are not able to handle the whole of their finances or doesn’t have capacity. They must be aware of the impact on the rest of their funds.

Be very careful about accepting any gifts from a person you act as deputy for; it could be a conflict of interest. As deputy, your Order will often say what gifts you can make. If your Order doesn't say this, you can't make any gifts without asking the Court, which needs time and money.

The Court of Protection is very careful about Inheritance Tax planning. The starting point is always that the person in your care needs to be financially secure. If the person has been injured, it is almost never appropriate to make gifts because the person will need the money. If you are looking after somebody who is older and who has more money than they are likely to need, the Court will be happy to look at proposed Inheritance Tax planning.

The Court sees meeting somebody's needs as different from making a gift. The Deputyship Order will often have a clause in it allowing you to meet the needs of individuals if they were previously provided for or be in the future. The Court does not see meeting these needs as a gift and so the Court's approval will not normally be required. However, if you are not sure about something you are intending to do, you should take legal advice.

Finally, the Practice Note warns of the dangers if you make an unauthorised gift as a deputy. You can be removed and asked to apply to the Court for retrospective consent for the gifts, if they do not, then you will need to return the gifts and your full name could be published in a case report. The Court could also apply to call in the deputy's security bond, which you would have to pay the security bond company. You could also be reported to the police.

So, gifting is something that deputies need to be very careful about. Getting it right first time is best and getting it wrong can have nasty effects and be a serious pain in the wallet.

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